CASE STUDY – BENCAR & DUVAL PHARMA

BACKGROUND INFORMATION

COUNTRY & COMPANY

 In this exercise you must imagine that you work for Bencar & Duval Pharmaceuticals.
 The date is 28 March 2018.
 Bencar & Duval Pharmaceuticals was formed by the merger of Bencar, a long established
innovator in cardiovascular pharmaceuticals, with Duval, a leading biotech company. The
merger, which happened 10 years ago, has created a highly successful and fast-growing
pharmaceutical company with a strong pipeline of new products and established brands in the
following disease areas:
o Ophthalmology
o Cardiovascular
o Oncology
o Diabetes
o Vaccines
 You are based in the fictitious country of Croantia.
 The country has been divided into five regions for sales activity.
 Croantia has a healthcare system that is very similar to the one in this country. In particular it is
similar in terms of:
o the balance between private and public health provision
o market access
o remuneration processes
o prescribing practices, regulations and compliance requirements
o distribution channels and systems

YOUR ROLE

 You are the new manager of a cardiovascular field sales team of 6 representatives.
 You are manager of Region West.
 Your KPIs are:
o Achieve sales budget for cardiovascular products in your region.
o Ensure each rep meets their individual activity targets and sales budget.
o Coach sales reps in the selling process and selling skills.
o Manage regional sales costs.
o Collaborate with other product franchises to maximise profitability for BDP with key
customers.
 You report to the National Cardiovascular Sales Manager.

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TEAM HISTORY & PRODUCTS

 Your predecessor as sales manager left to join a rival company selling similar products in the
same territory.
 The team has been together for 3 years.
 Your team is responsible for selling cardiovascular products to General Practice doctors and
hospitals in the west of Croantia.
 Your most important product is Bicovar which is an angiotensin receptor blocker (ARB)
prescription medicine for the treatment of hypertension in adults. Bicovar will be out of patent
in 12 months.
 The competitive issues in Croantia are the same as in your own market. Your main competitor’s
products in the ARB field are Lycovar, Systerin and Couplex. Lycovar was launched 6 months ago
and is the newest single ARB drug on the market. In a recent clinical trial, where there was a
head–to-head comparison, Lycovar was shown to have better blood pressure reduction than
Bicovar. A recent poll of General Practice Doctors indicated that they felt Lycovar could be more
useful for elderly patients than Bicovar. No direct comparison has yet been reported with
Tricova.
 In 4 weeks Bencar & Duval Pharmaceuticals will launch Tricova, a combination of Bicovar and a
diuretic in one convenient tablet. The Bicovar portion works by relaxing patients’ blood vessels
so blood flows more easily throughout their bodies. The diuretic portion reduces blood volume
by eliminating sodium and water from the body through urination. The combination of the two
lowers blood pressure.

MARKET DEVELOPMENTS

 12 months ago St Augustus University Teaching Hospital was opened in Crillana, a large town
situated in the middle of Region West. As a teaching hospital it is a centre of excellence within
the region and provides local patients with significantly better facilities and expertise. The
hospital has a substantial oncology research facility headed by a leading expert in the field. The
hospital has developed its cardiovascular services with the appointment of a new professor.
 Live-life Private Health Insurance began a large advertising and direct marketing campaign six
months ago. Reports from the company suggest that it has been highly successful, particularly in
the west of the country where subscription rates have increased by 30%.
 Last week it was announced that BBB Pharmacies and Rickard Pharmacies would merge to form
BBB Rickard the second largest retail and wholesale pharmacy chain in the country.
 Haverford Medical Centres Group recently announced that it would open 30 new medical
centres nationally over the next 12 months, eight of these being situated in Region West.

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 REGIONAL & NATIONAL CARDIOVASCULAR SALES (000S)

Capital East South North West Total

Actual Budget % Actual Budget % Actual Budget % Actual Budget % Actual Budget % Actual Budget %
2015 Q1 250 50 500 70 50 140 100 50 200 101 50 202 62 50 124 583 250 233
Q2 730 500 146 390 500 78 270 500 54 307 500 61 475 500 95 2172 2500 87
Q3 360 1000 36 890 1000 89 495 1000 50 792 1000 79 942 1000 94 3479 5000 70
Q4 2040 1200 170 1450 1200 121 1130 1200 94 990 1200 83 1117 1200 93 6727 6000 112
2016 Q1 2910 2600 112 2002 1500 133 1500 1500 100 1401 1500 93 1379 1500 92 9192 8600 107
Q2 4000 3200 125 2370 2000 119 1971 2000 99 1999 2000 100 1990 2000 100 12330 11200 110
Q3 4780 3900 123 2700 2300 117 2360 2300 103 2307 2300 100 1995 2400 83 14142 13200 107
Q4 6290 4500 140 3400 2800 121 2801 2800 100 2794 2800 100 2100 2800 75 17385 15700 111
2017 Q1 7010 6000 117 4161 4200 99 3461 3500 99 3479 3400 102 2450 3200 77 20561 20300 101
Q2 7962 7000 114 4740 5000 95 3904 4000 98 3791 4000 95 2500 3600 69 22897 23600 97
Q3 8500 8000 106 5720 5900 97 4549 4600 99 4300 4600 93 2450 4000 61 25519 27100 94
Total 44832 37950 118 27893 26450 105 22541 23450 96 22261 23350 95 17460 22250 78 134987 133450 101

Budget is the quarterly sales target.

% is percent of actual sales against budget.

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 MARKET SHARE BY CARDIOVASCULAR PRODUCT FOR REGION WEST

The table shows the percentage of market share of Bicovar compared to its main competitors for the
last three years. Smaller brands and generics are not shown.

Bicovar Systerin Couplex Lycovar

2015 Q1 1% 20% 15% -
Q2 9% 20.5% 14% -
Q3 11% 20.75% 14.5% -
Q4 13% 21% 14.75% -
2016 Q1 18% 21% 15% -
Q2 20% 21.25% 15.25% -
Q3 21% 21.25% 15.5% -
Q4 19% 25% 20% -
2017 Q1 18% 25.5% 21% -
Q2 16% 23.5% 18% 8%
Q3 14% 24% 17% 12%

MARKET DEMOGRAPHICS BY REGION

Total population Total households GP doctors

Region North 7,461,804 3,500,000 6,850
Region South 7,252,975 3,000,000 6,950
Capital 10,275,048 4,250,000 9,850
Region West 6,835,317 3,002,000 5,350
Region East 8,461,804 3,500,000 7,500

REGION WEST PATIENT PROFILE

The customer profile in Region West is described below.

 26 General and local hospitals.

 1 University teaching hospital that specialises in cardiovascular conditions.
 105 clinics and polyclinics.
 5, 350 GP Doctors registered in Region West.

Category Percentage (2010) Percentage (2014)

Children (under 18 years) 12% 12%
Adults 18 – 29 years 16% 13%
Adults 30-39 years 16% 12%
Adults 40-49 years 18% 20%
Adults 50-64 years 18% 20%
Elderly (65+ years) 20% 23%

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 KEY ACCOUNT INFORMATION FOR REGION WEST

In some regions BDP has adopted a Key Account strategy for major customers in which sales people from
each product group, marketing, market access and supply chain collaborate to improve overall commercial
performance. Data about the largest accounts in each region is collated every quarter. A Key Account
strategy has not been adopted in Region West, but is under consideration. The table indicates data for the
5 largest account in Region West.

Account Cardio- Ophthal-

Oncology Diabetes Vaccines Total
vascular mology

St Augustus University 75 121 20 29 5

250
Teaching Hospital (-10%) (+22%) (+5%) (+7%) (+95%)
Milverton General 97 83 32 14 17
243
Hospital (+21%) (+3%) (-15%) (-32%) (54%)
Westward Point Hospital 87 93 20 12 10
222
(-18%) (-12%) (-15%) (-4%) (-52%)
Haverford Medical Centres 52 35 21 32 27
167
Group (+11%) (+35%) (+19%) (+27%) (+75%)
Tivoli Walk-in Health 45 6 5 35 19
110
Centres (+1%) (+62%) (+20%) (+36%) (+45%)

Table shows: $ value (000s) of sales for last Qtr and in brackets the (% change to previous Qtr)

REGIONAL SALES COSTS REPORT

Each First Line Manager is responsible for variable costs of sales and marketing in their region. Below are
costs against budget for the Regions. In addition to these costs each region carries a fixed charge for
infrastructure from head office.

(000s) Capital East South North West Total

Actual Budget Actual Budget Actual Budget Actual Budget Actual Budget Actual Budget

Salesforce
Salaries 210 210 170 170 170 170 170 170 170 170 890 890
Bonuses / 66 65 45 56 41 51 38 51 26 47 216 270
commission
Travel & 45 40 37 35 35 35 32 35 26 35 175 180
subsistence
expenses
Marketing
Events 83 70 59 60 70 60 62 60 32 60 306 310
Literature 15 12 9 10 10 10 9 10 11 10 54 52
Advertising 10 25 27 20 20 20 25 20 30 20 112 105
PR 8 15 16 15 18 15 15 15 14 15 71 75
Total budget 437 366 361 361 357 1882
Total actual 437 363 364 351 309 1825

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 REGION WEST SALES TEAM

Region West has six local area sales Representatives. Each representative is responsible for selling in a
territory. Performance is measured in terms of sales activity and volume of sales. Representatives receive
individual commissions for their sales as well as team-based incentives in competition with the sales teams
from the other regions. For commissions to be paid and the team to be considered for national
competitions it is necessary for representatives to achieve or exceed their sales targets (budget).

The Local Area Sales Representatives in your team are:

Kamran Ansari
Andleeb Arshad
Qamar Ul Hassan
Imran Mehmood
Saima Khan
Parveen

TEAM MEMBER PERFORMANCE

Performance data for Region West’s sales team is provided below.

Team
Kamran Andleeb Qamar Imran Saima Parveen Target
average
Sales
calls (per 4.5 5 5.5 6.25 5.33 4.8 5.23 5
day)
Year to
date
average
140 134 145 120 149 135 137 200
sales/
month
(£)

Case Study Questions:

Answer the following questions specifically in relation to West Region:

1. How is West Region performing financially in terms of sales and costs?

2. What is happening to market share? Why do you think this is?
3. What is the current position with customers and key accounts? How
would you improve Key Account performance?
4. What changes or trends have happened in West Region that might affect
sales? How should you take advantage of them?

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